Superannuation Alert 17.10.18
Financial Services - 17 October 2018
Treasury - Release of draft legislation for one-year 'work test exemption' for recent retirees
On 2 October 2018, the Treasury released for public consultation draft legislation and regulations to give effect to its announcement in the Federal Budget to "provide a one‑year exemption from the work test for superannuation contributions, to allow recent retirees to boost their superannuation balances".
According to the Explanatory Memorandum, this will be effected by making amendments to the non-concessional contribution rules in the Income Tax Assessment Act 1997 (Cth) and the contribution acceptance rules in the Superannuation Industry (Supervision) Regulations 1994 (Cth).
Submissions will close on 26 October 2018.
ATO - Issues with transfer balance cap event reporting
On 4 October 2018, the ATO issued a media release regarding enquiries it has been receiving in relation to its Member Account Attribute Service (MAAS) and Member Account Transaction Service (MATS).
According to the ATO, some members are contacting superannuation funds advising that the ATO has "no record of a transfer balance cap event [even though the Fund] reported [it] in a previous transfer balance account report". The ATO has stated that the "most likely reason for this to occur is that there is an issue with the information that [the fund has] reported" and the fund should contact the ATO's Super CRT mailbox and provide details of the issue.
ATO - Changes made to Law Companion Ruling dealing with how defined benefit income cap applies to certain products
Source: LCR 2017/1A2 - Addendum
On 10 October 2018, the ATO issued an addendum to Law Companion Ruling 2017/1 which "clarifies how the defined benefit income cap applies to superannuation income stream pensions or annuities that are paid from life expectancy or market linked products that are non-commutable".
According to the ATO, the addendum:
- "[corrects] a statement that suggests a transfer balance credit, with respect to a market linked pension commenced on or after 1 July 2017, will be calculated by reference to a special value"; and
- "clarifies the position concerning a transfer balance credit that arises in respect of a reversionary life expectancy or market linked pension or annuity in certain circumstances".
The changes were applied on and from 28 April 2017.
Monique Morgan | Lawyer
+61 2 8020 7714
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